[This article was contributed by LWN reader Joe
on Wednesday that it had filed for bankruptcy
protection on Monday, January 13. The company filed for protection in France,
a "declaration de cessation des paiements," which is similar to filing
Chapter 11 bankruptcy in the United States.
MandrakeSoft currently has a debt load of about €2 million, or about $2.1
million U.S. The company will be able to continue operations, albeit under the
direction of a court-appointed administrator. According to Gaël Duval, the co-founder of MandrakeSoft, the Mandrake development team is still on the job and
will continue to release new products. "We're nearly at break-even and the
business is growing every month. We do everything possible to ensure the best
future for Mandrake. Users shouldn't be concerned. There will be future
The company is not the first Linux distributor to file for bankruptcy
protection. Stormix Technologies debuted its Debian-based Storm Linux
distribution in late 1999 and had filed for bankruptcy by January of 2001. The
Vancouver-based company never recovered, and users of Storm Linux were left
high and dry. Since Storm Linux contained a good deal of proprietary software,
there was no way for users to continue development of the distribution on their
own. Mandrake Linux users, at least, need not fear that problem.
The signs of monetary difficulties have been there for some time now. The
company went public at the end of July, 2001 and raised a total of €4.3
million. Since that time, MandrakeSoft has issued several calls for user
contributions, in the form of subscriptions to its Mandrake Users Club, to
keep the company
afloat on its way to profitability. The Mandrake Users Club offers a
few perks, like the ability to vote on new packages, but hasn't been enough to
lure the majority of Mandrake users into contributing.
Whether users should pour in cash now or wait and see whether MandrakeSoft
pulls through is up to them, according to Duval. "If they want to boost our
development, they should sign up." Duval says that it is unlikely that
MandrakeSoft won't emerge from bankruptcy, but even if the company distributing
Mandrake fails the distribution can go on. "Mandrake Linux is 100% Free
Software so there are good chances that the project could continue."
The news of MandrakeSoft's bankruptcy filing is sure to reignite the debate
over whether a company can make a profit on a product that is purely Free
Software. There's no question that the number of people who buy Mandrake
products or contribute money through the Mandrake Users' Club are far surpassed
by the number of users who download and use Mandrake Linux without contributing
money to the project.
Consolidation in the Linux distribution market seems inevitable. Still, it
is unfortunate that MandrakeSoft, with its strong commitment to free
software, has found itself in this situation. We can only hope that the
bankruptcy process goes well, and MandrakeSoft is able to keep on serving
its users for many years to come.
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